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Thanks Piers but I find that fascinating. I wonder if I am alone (that is always possible) or whether many people who dozed through their lectures hadn't spotted that the assumption of profit max may, in reality, have been a myth except in a strict logical sense. I should dig further! Duncan -----Original Message----- From: Economics, business, and related subjects [mailto:[log in to unmask]] On Behalf Of Piers Coutts Sent: 20 September 2005 12:41 To: [log in to unmask] Subject: Re: [ECON-BUSINESS-EDUCATORS] MC = MR I think it does what it does - no more or less. I don't think it was ever claimed to do more ... Piers Coutts -----Original Message----- From: Economics, business, and related subjects [mailto:[log in to unmask]] On Behalf Of Duncan Williamson Sent: 19 September 2005 18:14 To: [log in to unmask] Subject: Re: MC = MR Well, my next question is to ask whether the whole thing is bunk then since it merely guarantees profit maximisation under present conditions but says nothing about the optimum optimorum. If so, is this widely known? If not, shouldn't something be done about it?!! Duncan Williamson -----Original Message----- From: Economics, business, and related subjects [mailto:[log in to unmask]] On Behalf Of Piers Coutts Sent: 19 September 2005 17:40 To: [log in to unmask] Subject: Re: MC = MR All that MR=MC guarantees is that the slopes of the TR and TC functions are the same, i.e. that the distance between them (profit) is maximised. It makes no statements about whether costs have been well-controlled, or whether the revenues have been efficiently extracted - the assumption is that the wonder of market competition will have assured that. MR=MC is simply the profit maximising point, given the cost and revenue data. Or am I getting old...? Piers -----Original Message----- From: Economics, business, and related subjects [mailto:[log in to unmask]] On Behalf Of Duncan Williamson Sent: 19 September 2005 17:24 To: [log in to unmask] Subject: Re: MC = MR Yes and then the follow up question Piers: to what extent is it assumed or proven when MC = MR that MC is itself at an optimum level and that MR is also at an optimum level. If that is a non sequitur, I'd be grateful for an explanation but if not, I'd be grateful for an explanation! I really hope that makes sense! Duncan Williamson -----Original Message----- From: Economics, business, and related subjects [mailto:[log in to unmask]] On Behalf Of Piers Coutts Sent: 19 September 2005 17:07 To: [log in to unmask] Subject: Re: MC = MR MC is increasing, i.e. cuts MR from below (textbooks tend to ignore the confusing case of the earlier MR=MC intersection) Is that what you wanted, Duncan? Piers Coutts -----Original Message----- From: Economics, business, and related subjects [mailto:[log in to unmask]] On Behalf Of Duncan Williamson Sent: 19 September 2005 16:13 To: [log in to unmask] Subject: MC = MR Dear All, After years and years of just accepting that profit maximisation occurs when MC = MR I suddenly thought of a question that many of you will be able to resolve for me. Under what conditions and assumptions is MC = MR the profit maximisation level of output? For fear of putting my clumsy size 11s in it, just a question to start you off. I might then have a follow up question depending on the responses you give. Best wishes Duncan Williamson